Analysis of Gross Margin Improvement Potential for iSoftStone's Embodied Intelligent Robot Closed-Loop Solution

Based on the information I have collected, the following is a systematic analysis of the gross margin improvement potential for iSoftStone’s embodied intelligent robot closed-loop solution:

The Chinese embodied intelligent robot market is in an explosive phase. According to IDC forecasts, the user spending scale of Chinese embodied intelligent robots is expected to exceed $1.4 billion in 2025 and soar to $77 billion by 2030, with a compound annual growth rate (CAGR) of 94%[1]. This growth is mainly driven by the following factors:

• Technological Breakthrough
  : Deep integration of large AI models and robots, enabling the leap from single-function execution to a complete operational chain[1]
• Scenario Replication
  : Evolution from pilot demonstrations to large-scale commercial implementation[1]
• Policy Support
  : Continuous promotion of the robot industry by national strategies

As a core partner of Huawei, iSoftStone holds an important position in the Ascend Ecosystem and HarmonyOS Ecosystem. The company actively participates in the construction of the HarmonyOS Ecosystem and has established ecological cooperation with more than 400 equipment manufacturers across various industries, helping over 1,100 products access the HarmonyOS Connect Ecosystem[2].

From a financial trend perspective, the company showed a continuous growth trend in revenue, net profit, and profit margin from 2021 to the first three quarters of 2025[3]. Although specific gross margin data for the robot business has not been publicly disclosed, we can infer it from industry comparable companies and business models.

From the data of comparable companies, there are significant differences in gross margin levels in the embodied intelligent robot field:

• Core technologies such as large AI models enhance product added value[5]
• iSoftStone’s positioning as an “End-to-End Service Expert” in the Ascend Ecosystem gives it technology premium capabilities[6]

• With the increase in production volume, unit production costs will decrease significantly[5]
• The capacity expansion plan from 2026 to 2030 shows that the annual capacity of industrial humanoid robots will expand from 5,000 units to 20,000 units[5]

• The increased proportion of high-value-added special robots will drive up the overall gross margin[5]
• iSoftStone’s 2.0 MaaS platform has a differentiated competitive advantage[3]

• Closed-loop solutions have higher gross margins compared to single products
• Build competitive barriers from the “Scenario-Data-Model-Application” closed loop[7]

Based on industry trends and the company’s business characteristics, the expected gross margin improvement potential for iSoftStone’s embodied intelligent robot closed-loop solution is as follows:

1. Intensified Market Competition
   : Many enterprises entering the embodied intelligent robot track may compress profit margins
2. Technology Iteration Risk
   : Rapid iteration of AI technology may affect product competitiveness
3. Cost Fluctuation
   : Changes in core component costs may affect short-term gross margins
4. Customer Concentration
   : Dependence on major customers may affect bargaining power

##5. Conclusion

iSoftStone’s embodied intelligent robot closed-loop solution has significant gross margin improvement potential, projected to gradually rise from the mid-term range of35%-45% to the long-term range of45%-55%. This improvement is mainly based on:

• Product premium capabilities from technological accumulation
• Scale effects from capacity expansion
• Continuous product structure optimization
• High-value attribute of closed-loop solutions

As a core partner in the Huawei Ecosystem, the company has unique advantages in computing power and AI fields, and is expected to achieve high-quality growth in the embodied intelligent robot track.

[1] IDC Report - “China Embodied Intelligent Robot Application Market Analysis and Typical Application Practices, 2025” (https://my.idc.com/getdoc.jsp?containerId=prCHC54010625)

[2] Dongguan Securities Research Institute - “Computer Industry Biweekly Report” (https://pdf.dfcfw.com/pdf/H3_AP202512261808623392_1.pdf)

[3] Tencent News - iSoftStone Financial Data Chart (https://inews.gtimg.com/om_bt/OZHbphfVqGhrKT00gDjeWOi8vBQzUyMt1ZhBVFSQOloYAAA/641)

[4] Investing.com - Woan Robotics IPO News (https://cn.investing.com/news/stock-market-news/article-3144912)

[5] Caifuhao - Beitou Technology Robot Business Comprehensive Analysis Report (https://caifuhao.eastmoney.com/news/20251229005543438790440)

[6] Bulexiu Strategy Network - Sorting of Concept Stocks in the AI Computing Power Field (https://bulexiu.com/n/33974.html)

[7] Soochow Securities Research Institute - “Mechanical Equipment Industry Tracking Weekly Report” (https://pdf.dfcfw.com/pdf/H3_AP202512281809879538_1.pdf)